What is Forex Trading?
Forex trading has the great potential of becoming a profitable and fulfilling career that will let you have a lifestyle that few other lucrative activities in the world can offer to people from many roads in life and without asking any of those men and women for a diploma or some special certification.
But Forex trading is not easy; it may be simple to enter and place your first trade but becoming a profitable trader is a different thing. You will need to acquire the right knowledge and techniques in order to understand and know when to enter or leave a trade always fulfilling the main objective every trader must have; making money.
One of the most popular fields in cryptocurrency fields is Sprint tokenization. There are two kinds of analysis you can perform on the Forex markets. They are known as technical analysis and fundamental analysis. It is common that traders tend to divide themselves into “technical” and “fundamentalists”. Each group devotes themselves to the main tools each kind of analysis gives them.
Technical forex traders base their trading on the analysis of the charts and the number of indicators derived from the plots of price oscillations and patterns. Meanwhile, fundamentalist traders base their trading mostly on the fundamental numbers and economical indicators of countries economies. Though, even if divided, both tendencies tend to complement each other to some degree.
In this article, I will place myself on the “fundamentalists” side and focus on one of the situations every forex trader must be aware of and don’t let the events involved affect his trading efforts.
World events and wise forex Trading:
This risky situation is when unprecedented chaotic world events start to develop as the trading day goes on. The power of the media (tv, internet, printed) can magnify and sometimes it may even distort the events taking place and impact the trading journey in a significant manner. The result of this magnification and rapid diffusion of the news about the series of unfavourable events taking place is an increased atmosphere of fear, confusion and uncertainty in the trading world. And fearful traders are not prone to make the best trading choices because they have given themselves to panic and emotional reactions instead of reasoned and intelligent decisions.
If you need to have more specific examples of this kind of event you can search a bit inside your memories and consider the impact of just a few types of unfavourable chaotic world events such as the political upheavals or corporate scandals of companies such as; Enron, WorldCom, or of people as the case of Martha Stewart trial, etc. There is also the example of the terrorist attacks on Sep 11 in New York, March 11 in Spain, etc. Also, natural disasters: like tsunamis, earthquakes, floods, freezes, droughts, hurricanes along with wars can cause great disruption in a trading journey.
In short, every forex trader should be totally sure that his method of trading has built-in safeguards (stops, limit orders) to prevent a major financial loss from his trading account in case any of the unfavourable events I mentioned above ever takes place. And being realistic, many of those events will surely happen in the future.
Real Forex traders learn to like Losses:
As a forex trader, you have to learn how to take losses. Period. Don’t be a crybaby. Learn how to take losses.
Learning how to take losses is one of the most important lessons you must learn if you want to survive as a trader. Nobody is 100% right all the time.
Losses are inevitable. Even Michael Jordan and Tiger Woods lose sometimes and they’re considered the best in their field.
There will be trading streaks where you’ll have a number of successful consecutive trades, but that will eventually come to an end you will take a loss.
At that point it’s very important not to lose your head, you must remain in control of yourself. Don’t have a cow man.
Take a break. Calm down and relax. Take a chill pill dude.
Until you’ve regained a clear mind and the ability to think logically again, stay out of the market.
Don’t whine about your loss and never carry a prejudice against a loss.
The key to managing losses is to cut them quickly before a small loss becomes a large one.
I repeat. The key to managing losses is to cut them quickly before a small loss becomes a large one.
Never ever think that you will never lose. That’s just ludicrous. Losses are just like profits, it’s all part of the trader’s universe.
Losses are unavoidable. Get over the loss and move on to the next trade.
How to win at Forex Trading?
Foreign currency exchange, the greatest game in the world with a daily trading volume of over a trillion and a half dollars (thirty times larger than the volume of all the U.S. equity markets combined), has its share of winners and mostly losers. Do you want to learn how to be in the winners’ circle?
Like any game, it’s important to know the rules in order to win. You don’t have to be a professional to enter the sport, but you should have a basic understanding of the game and how it’s played. Most of this can be learned for free from the online brokerage houses which also give you free trading software so you can actually practice playing the game and gain your confidence and skills before plunking down your real cash in the big leagues.
As in any sport, the most important thing to do is practice before you actually play in the real game. I can’t stress that enough. Practice, practice, practice makes perfect. The only thing it will cost you is your time. When you think you’re ready to step on the playing field, start small. Most brokers will allow you to start trading in mini accounts with as little as 300 dollars.
Win at the currency trading:
And now for what you’ve been waiting for, the secret to winning at Forex. You need to have a trading strategy. In other words, you need to know what to look for and how to trade to make money. Work out a basic game plan you expect to follow and never let your emotions influence your forex trading. Rule number one is never to risk more than 2% of your account balance on any one trade. That way if you have a streak of bad luck you will not wipe out your account. Rule number two is that if you have a string of five losses in a row, stop trading real money and go back to demo trading until you have demonstrated success for at least a week.
Only then do you go back to trading with real money. Rule number three is to employ strict trading rules that you stick to no matter what and do not trade wildly. If you preserve your capital from big risks you will allow it to grow steadily and consistently. Don’t try to make a killing in a short time and you can reasonably expect to grow your account by 10% a month or more.
Remember to have fun with it and learn a little more each day. This could turn into a lifelong professional career. Learn More.
Wishing you success,
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